Are ex-Portal cases restricted to fixed costs? Qader and the post October 2023 FRC reforms.

 

 

Practitioners may well have experience of a claim which was submitted through the Portal but the evidence changes and it becomes apparent the claim is more valuable than anticipated. 

 

RTAs, Employers Liability, Occupiers Liability, Public Liability & Package Travel are all claims which can be dealt with through the Portal for claims with a value of up to £25,000. 

 

So what happens if you submit your claim via the Portal and it subsequently becomes a bigger claim? What costs apply? 

 

 

The Court of Appeal decision in Qader v Esure [2016] EWCA Civ 1109 in short meant that any claim commenced through the Portal would be subject to fixed recoverable costs unless and until that claim was allocated to the Multi-Track. This arose from the wording in CPR 45X.29 A & D which in essence provided that the scope of fixed costs applied to any claim commenced under the RTA or EL / PL protocols would simply move to Fixed Recoverable Costs rather than exiting Fixed Costs completely. The Court of Appeal's judgment lend to an amending of CPR 45X29.A & D which saw the rules provide that fixed costs would apply to an ex-Protocol claim "for as long as the case is not allocated to the multi-track [...] in a claim stated under the [RTA. EL/PL or Pre-Action Protocol for Resolution of Package Travel claims".  

 

This meant a claim that started life on the Portal and subsequently dropped out would remain subject to fixed costs, even if if the claim settled above the upper limit of £25,000 if it had not been allocated to the Multi-Track. Even a Notice of Proposed Allocation to the Multi-Track wasn't enough. It would have to be a formal allocation to bring a claim outside of fixed costs. Indeed, there have been notable reports of cases receiving the allocation notice just days after settlement and even that was too late.  

 

 

So do the Qader principles apply to cases falling under the post 1 October 2023 fixed costs rules, bearing in mind the upper fixed costs limit is now extended to claims with a value of up to £100,000? 

 

The short answer appears to be no. One of the key factors in the Court of Appeal's decision has fallen away. The revisions to Part 45 remove the 45.29A & D rules and instead replace it with a more general provision. 

 

CPR 45.44 addresses Fast Track claims and states that: 

 

 

Wording to the same effect is used for Intermediate Track cases at CPR 44.50. The point here is that the reference to claims started under any of the Protocols is omitted.  

 

Practically speaking this means if a claim is commenced on the Portal then exits the relevant costs regime ought to be arguable on the basis of whether the specific claim is one which would normally be allocated to the Fast, Intermediate or Multi-Tracks. Crucially this means that unlike under the old rules where a party would need allocation to get out of fixed costs there is no longer a provision in the rules locking a party into fixed costs where a claim exits the Portal. There will remain arguments around what track the Court would have allocated the claim to (and what complexity band assigned where applicable). Importantly this means that an ex-Protocol claim is not automatically fixed costs where the claim is settled pre-allocation (though it must be said it's not automatically not fixed costs either). Having the flexibility to argue though will hopefully see a more commonsense approach to such costs disputes.  

 

However, there is a counterpart which should be reflected. In Qader the Court of Appeal made the point that the requantification of a claim above the upper limit of £25,000 "may not automatically lead to [...] allocation to the multi-track". One point of note here is that Fast Track costs may be more attractive to an ex-Protocol claim than the Intermediate Track. As an illustrative example, an ex-RTA Protocol case with costs on the Fast Track. Such a case would, if allocated to the Fast Track, be subject to Complexity Band 2 (for the reasons set out in the following paragraph). If such a claim settled for say £30,000 pre-issue then the Claimant would be entitled to £2,374 plus 10% of damages over £10,000 i.e. £4,374 plus VAT. If that same claim was on the Intermediate Track Complexity Band 1 then the fixed costs would be £1,652 plus 3% of damages i.e. £2,552 plus VAT. That is over 40% less in real terms. That's not say the Intermediate Track is automatically worse, if the case was on Complexity Band 2 then you'd get £5,162 plus 6% of the equivalent damages i.e. £6,962, just under 40% higher than the equivalent Fast Track costs. What this illustrates is that where you have any claim which settles pre-allocation you really need to do your sums. Arguing Intermediate Track could net less costs if Complexity Band 1 than a higher Complexity Band under Fast Track. And as Qader shows a case which has a value above the normal Fast Track limit could still be held to be a Fast Track case.  

 

And to follow on from the above, a further side point is to look at Table 1 under Part 26.15 which sets out the definitions for the Fast Track complexity bands. Complexity Band 2 includes ex RTA and Package Travel Protocol claims. There is a line of argument that the Fast Track Complexity Bands define a route for ex-RTA and Package Travel Protocol claims on the basis of the Qader logic that an ex-Protocol claim is not necessarily Multi-Track. However, if adopted this argument ignores the fact that the rules around claims 'commenced under any of the Protocols' are no longer and moreover that logically assignment can only follow allocation i.e. procedurally it would not be right to allocate a track because of assignment. So whilst it could be tempting to lead the court down this line of thinking, the reality is it can be seen to be a somewhat flawed approach. There is also no reference to the EL/PL Protocols in the Complexity Band 2 tables so this argument would not follow for those claims. This inconsistency further supports the view that Qader no longer has relevance to unallocated ex-Protocol claims.  

 

It is also worth noting (as an aside) that there is a rule under the new Part 45 rules which does apply only to ex-Protocol cases. If the case is Fast Track then 45.47 allows an additional £150 plus VAT for advice whilst the FT complexity bands set out specific bandings for ex-Protocol cases. So a claim which goes through the Protocol could see the level of overall fixed costs restricted compared to a non-Protocol claim. 

 

The latter point affirms a Practitioner's need to carefully consider the value of their claim at the outset and specifically whether such a claim is suited to the Protocol at all. A claim has to be reasonably valued over the upper limit to sit outside the Protocol (see Plaktevicius v Etills Ltd (County Court at Derby)). 

 

A claim not commenced on the Portal which should have been, however, could see costs restricted to Portal fixed costs (though in that scenario the logic is that such costs would have been applicable in any event) and those FRC are extremely low. 

 

What's clear is that firms will likely want to avoid Portal costs in whatever reasonable way they can. 

 

 

The changes to the fixed costs rules as of 1 October 2023 appears to undo a significant part of the reasoning behind Qader which prime facie appears to give receiving parties greater flexibility to push for whatever the relevant costs would be. It will fall to the court to hear arguments about the prospective track and where applicable banding but crucially the question of fixed or non fixed costs can be argued again. 

 

The rules no longer set out that an ex protocol claim is automatically fixed costs and for receiving parties that will no doubt be welcomed. 

 

For claims subjected to fixed costs there remains the safety valves of applying to get costs outside of FRC either by exceptional circumstances or vulnerability with the opportunity for an uplift (or decrease) where unreasonable conduct is an issue. 

 

Parties will be used to viewing ex-Protocol cases through a Qader lens but that can no longer be the case. The erosion of the Qader principles does not mean an automatic entitlement to time basis costs but it does open up the window to argue the point and that in itself is a marked and significant change.